Finance costs skyrocket to 133% as operating costs jump year-over-year

Tropical Battery ended its 2020 financial year last September with revenues growing by seven per cent to $1.87 billion coming from $1.74 billion in 2019.

Revenues for the fourth quarter inched up by three per cent, moving from $492.57 million in 2019 to $505.36 million for the period under review. Pre-tax profits closed the year at $60.58 million, a 30 per cent decline relative to the $86.58 million booked in 2019.

For the fourth quarter, Tropical Battery, which became a public company last year following its successful initial public offer of shares during the quarter, reported a loss before tax of $1.55 million, relative to a profit of $18.96 million made in the fourth quarter of 2019.

Taxes of $31.24 million were reported for 2020 compared to a tax charge of $23.69 million in 2019. Net profit amounted to $29.34 million compared to $62.90 million in 2019, reflecting a plummeting of 53 per cent.

Net loss for the fourth quarter totalled $16.47 million, relative to the net profit of $13.04 million reported in the corresponding period for 2019. Total comprehensive income for the year amounted to $31.66 million, down from the $50.66 million reported in 2019.

Operating cost rose in 2020

Administrative, marketing and selling expenses rose by 10 per cent to close the year at $440.14 million versus $400.89 million reported in 2019. Operating profit for the period totalled $122.41 million compared with $114.27 million in 2019.

The operating profit for the quarter dipped by 14 per cent to end 2020 at $30.89 million. Operating profit in 2019 was $35.86 million.

Other operating income for the year amounted to $13.72 million, which represents a 51 per cent increase relative to the $9.09 million booked the previous year. Impairment loss on trade receivables closed at $6.36 million versus an income of $1.14 million booked 12 months earlier.

Cost of operating revenue amounted to $1.30 billion, which is a six per cent increase in comparison to the $1.23 billion booked in the previous year. Consequently, gross profit amounted to $568.91 million, which is up 11 per cent from the $514.03 million reported the prior year.

Gross profit for the quarter ended at $144.89 million compared to 2019, which came out at $135.37 million.

Massive increase in finance costs

Finance costs increase year-over-year by 133 per cent to a total of $45.02 million as against the $19.29 million recorded in 2019. In addition, Depreciation closed at $33.35 million compared with $23.87 million reported in 2019.

Finance income for the period totalled $2.82 million relative to $6.38 million in 2019, a 56 per cent decrease year on year. For the quarter, finance loss amounted to $7.14 million relative to a loss of $2.80 million in 2019.

As at September 30, 2020, total assets amounted to $1.45 billion, compared to its value of $1.35 billion a year ago, which represents an eight per cent increase year on year. This increase was attributed to an 83 per cent increase in cash and cash equivalent, which amounted to $262.50 million and a 131 per cent increase in property, plant & equipment which totalled $161.91 million.

Commenting on the 2020 performance, the management of Tropical Battery reported that, “the work from home and social distancing procedures implemented to slow the spread of COVID-19, could have had a more severe impact on Tropical Battery’s distribution. However, due to recent innovations and upgrades to our distribution strategy in recent years, the company was able to minimize the effect of less consumer traffic”.